How and Why Aviation has Changed

In terms of aviation, the 80's and early 90's spoiled us. There were a dozen major airlines, falling all over themselves and each other, racing to carry as many people as they could, at any cost.

Even if it meant operating at a loss to do it. This was a boon for the flying public as it meant connections everywhere, to hub cities and smaller communities on major airlines.

During this period, from Paducah you could fly to Nashville, Memphis, St. Louis, Louisville, Evansville, and even Frankfort. to give you an idea how far and wide airlines were flying.

Then in the mid to late 90's the winds began to change, and the flight paradigm began to shift as airlines were starting to go under, or operate an unsustainable levels.

What forced this change,rising gas prices. In fact by the mid 2000's gas prices made up 17% of an airlines expenses, that's huge, Under their current business model they couldn't buy enough fuel to fly the planes they had. So they knew it was the time to evolve or die.

So Airlines began streamlining their operations to cut costs and get back to profitability because now they needed the money.

They began by pulling out of under performing cities, de-hubbing others, shrinking their fleets, and merging/buying smaller airlines, mainly for improved gate access at hub airports, or to cut competition.

As the graphics, show over the last 21 years, we've gone from 10 major airlines to 3, and the number of hubs has been cut in half.

To give you an example of the drastic, change we look at Memphis. In 2012, Delta, de-hubbed the city and the 4 years since, an airport that needed 100 gates per day to handle traffic, now only needs 30 gates to operate. And they are closing or tearing down two concourses because they

don't forsee ever needing them again. and in 2014 they did the same to Cleveland.

The next big move was fleet changes. For the most part, airline fleets weres made up of old aircraft that were expensive to operate, maintain, and burned a lot of fuel. So they needed to make some changes, this further drove the de-hubbing movement and the termination of ervice in other cities,as they desired to operate as few planes as possible so they could retire their oldest planes and re-work schedules, operating with as few planes as possible. Instead of buying new small planes they opted to purchase larger ones, that could carry more people and were more fuel efficient.

This led to the remaining cities and hubs seeing fewer daily flights, on larger planes. In fact as a result of this paradigm shift there are very few if any planes being built today with more than 9 seats or fewer than 90 seats.

Even all of these changes weren't good enough. Airlines began developing complex, proprietary algorithms, that change airfares daily to reflect supply and demand. These formulas determine what to set a base fare at, and when to start increasing it, with the belief that if you want to fly out this weekend bad enough you'll pay more to do so. About this time you began to see airlines start charging "ancillary fees," for things, like baggage, wifi access,in-flight entertainment, itinerary changes, meals, upgrades, and more.They are also dialing back the number of direct flights between major cities, or charging premium prices for the privilege, and more and more targeting business travelers over leisure ones.

What this means for you is that there are fewer flight options from non-hub cities, with fare prices that change daily based on time, number of days until your trip, number of stops, and route popularity. Meaning you either have to make sacrifices in terms of itinerary, and number of connections, or drive at least an hour or two to get other options. In short in just two decades, airlines have gone from getting to where the people are, to forcing people to come where they are, a full and complete turnaround.

Today we have 4 "major" airlines operating fewer flights than ever, on larger planes, from fewer cities and hubs but carrying more people than ever and making record profits. Yet in spite of these profits, airlines aren't eager to add cities, or flights again unless they can guarantee that doing so will make them more money.

Furthermore, to get an airline interested in serving them, many cities have to put up "guaranteed" money, usually in the range of at least $1 million, to attract an airline. In some cases this works, and the airline makes so much money that they don't need the guaranteed money and give it back. But if this "new service" isn't profitable, when they spend that money, they end the service leaving a community high and dry, making improving air service for cities like Paducah even more challenging than before.

So now that you know the climate we operate, and you fly in, we hope that you will better see just how much the industry has changed and the challenges cities like us face in terms of getting, keeping, growing, air service, and why the salad days are over for us, the flying public, as the few airlines that are left hold all the cards, and that's not likely to change anytime soon. It is most definetly not your father's airline industry.

To learn more about air service in Paducah, and what the Essential Air Service (EAS) program means to us, click on the link to see our blog post on theEAS Program.